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The National Highways Authority of India (NHAI) is aiming to reduce its overall debt to below INR 2 lakh crore by the end of the current financial year, according to a senior government official. NHAI's debt had peaked at around INR 3.5 lakh crore in 2021-22, but has since been steadily brought down following a policy decision to stop fresh borrowings. As of December 31, 2025, the authority's outstanding debt stood at INR 2,35,947 crore. The reduction has been supported by significant prepayment of liabilities, including a large portion of loans from the National Small Savings Fund. In addition, proactive refinancing and renegotiation with lenders has helped lower interest costs, resulting in substantial savings over the past two years.
State-owned National Highways Authority of India (NHAI) is planning to reduce its outstanding debt to below INR 2 lakh crore by the end of the current financial year ending March, a senior government official said. The move is in line with the government's broader strategy to strengthen the authority's balance sheet while maintaining momentum in highway development. Advertisement
NHAI's debt burden had reached a peak of around INR 3.5 lakh crore in 2021-22, largely due to aggressive borrowing to fund rapid expansion of the national highways network. However, since 2023, the authority has not raised fresh borrowings, enabling a sustained reduction in liabilities. As of December 31, 2025, NHAI's outstanding debt stood at INR 2,35,947 crore, reflecting a reduction of nearly 32 per cent from peak levels.
According to the official, although no fixed numerical target was set at the beginning of the year, the authority now expects its total debt to fall below INR 2,00,000 crore by the close of the current financial year. A key contributor to this improvement has been the prepayment of liabilities worth around INR 86,000 crore. Of this, nearly INR 50,000 crore related to loans taken from the National Small Savings Fund (NSSF).
Early retirement of high-cost and long-tenure debt has significantly eased pressure on NHAI's finances. The official noted that prepaying loans ahead of schedule has led to a steep decline in overall debt levels, while also improving cash flow visibility for future years.
In parallel, NHAI has actively renegotiated borrowing terms with banks and financial institutions. Through refinancing and refixing of interest rates, the authority has managed to lower its borrowing costs by around 80 basis points over the past two years. This exercise alone has resulted in savings of more than INR 3,500 crore in interest expenses, providing additional fiscal headroom.
The reduction in debt comes at a time when NHAI continues to focus on asset monetisation, including toll-operate-transfer (TOT) bundles and infrastructure investment trust (InvIT) routes, to fund new projects without adding to liabilities. Together, these measures are expected to place the highway authority on a more sustainable financial footing, while supporting long-term infrastructure development across the country.
Source - PTI
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